December 17 – 23, 2018 | Securities Definition, Facebook Cryptocurrency & More Crypto News

North iQ Weekly Newsletter is curated to provide insights on digital asset industry developments, market announcements, and performance analysis.

US Lawmakers Seek to Change “Securities” Definition to Exclude Cryptocurrencies

December 20 – Two US congressmen, Warren Davidson (R-Ohio) and Darren Soto (D-Fla.) have introduced a bill that would exclude cryptocurrencies from the decade-old definition of a “security”. While changing legal definitions may seem insignificant, supporters of the cryptocurrency industry believe that re-classifying “digital tokens” is a necessary step towards regulatory clarity and certainty in the space. The bipartisan effort between the two representatives is a bill dubbed the “Token Taxonomy Act”, which will seek to re-classify these digital tokens. “In the early days of the internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space,” Davidson said.

For example, some digital tokens are actually blockchain software programs that allow developers to build on top of existing blockchains. Some of these can be traded without any intermediary, meaning these particular tokens are much different than a stock traded on an exchange, even though laws and regulations classify both as the same type of security. “These decentralized networks don’t fit neatly within the existing regulatory structure,” said Kristin Smith, head of the Blockchain Association in the United States. “This is a step forward in finding the right way to regulate them.” So far, the US Securities and Exchange Commission (SEC) has only classified Bitcoin and Ether not as securities, meaning other digital tokens and cryptocurrencies could still be classified as such.

Read the full article here.

Canada Could be Well-Positioned for the World’s Digital Asset Transformation

December 21 – The major technology company Facebook is planning to create its own cryptocurrency that will be used to make money transfers within its application, WhatsApp. Facebook’s cryptocurrency will first be introduced in India, where it will focus on the remittances market. The cryptocurrency itself is reported to be a “stablecoin”, meaning it will more than likely be tied to some kind of fiat currency. However, Facebook has yet to confirm the asset in which the stablecoin will be tied and how the company will handle custody.

WhatsApp is quite popular in India, and has about 200 million active users. Users from rural india had reportedly doubled in 2017 as internet infrastructure improved and user cost declined. The World Bank estimates that India received around $69 billion in foreign remittances in 2017, which represents about 2.8% of GDP. Facebook entering the cryptocurrency industry is quite the change of pace for the company, considering the company had previously banned crypto advertisements back in January 2018.

Read the full article here.

Mark Dow Closes His Bitcoin Short After Calling Top

December 12 – Back during the peak of cryptocurrency prices around December 2017, renowned trader Mark Dow initiated a short in the world’s largest cryptocurrency, bitcoin. Between regulatory uncertainty and the recent Bitcoin Cash hard fork, the cryptocurrency suffered a drawdown throughout most of 2017. Dow has now exited his short on bitcoin after the cryptocurrency retraced approximately 80% from its all-time high.

“I’m done. I don’t want to try to ride this thing to zero,” said Dow. “I don’t want to try to squeeze more out of the lemon. I don’t want to think about it. It seemed like the right time.” Dow notes that some speculative investors buy into these asset classes because they believe the narrative and do not consider the fundamentals. “People buy into these assets because they believe the narrative, and you look at the asset prices to see if the narrative is weakening or changing,” said Dow. “It’s not easy — you could be wrong, but that’s the sign you look for. But it doesn’t mean you’ll get it right.”

Read the full article here.

Chainalysis Releases New Research on the World’s Bitcoin Addresses

December 19 – Chainalysis has released new research on Bitcoin addresses and wallets in a recent blog post. The research notes that the Bitcoin blockchain is indeed vast, and forms a network of over 460 million addresses. While combined addresses are still on the rise, the research notably finds that only 37% are economically relevant when accounting for the size of the network. Chainalysis identified that 288 million addresses mostly hold zero balances and 93% of them have only transacted once, meaning they are mostly economically irrelevant.

However, the remaining 172 million addresses are economically relevant, and Chainalysis has determined that 86% belong to named services, such as exchanges other businesses. This means that many of the addresses are only created to exchange bitcoin between people and services. The research concludes that approximately 20% of bitcoin transactional volume should be considered economic, meaning that much of the remaining transactional volume acts as a “connective tissue” to the rest of the market.

Read the full article here.

Coinbase Releases Crypto-to-Crypto Trading for Clients

December 12 – Major cryptocurrency company Coinbase has reported that they are adding support for crypto-to-crypto trading for its retail clients. The feature has previously been available to the company’s professional trading services, according to Anna Marie Clifton, a product manager at Coinbase. Through the new feature Coinbase Convert, customers can trade supported alternative cryptocurrencies with a bitcoin pairing, such as LTC/BTC or ETH/BTC. “The functionality is giving customers the ability to directly convert between one cryptocurrency and another, which is pretty advanced,” she said.

The implementation of crypto-to-crypto trading was in part due to client suggestions. Some customers wished to convert their bitcoin directly into cryptocurrency that gives them the ability to interact and participate with decentralized applications, such as ether (ETH). Previously, customers would have to convert into USD, then back into the alternative cryptocurrency again, which means there would be two fees.

Read the full article here.

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This Weekly Cryptoasset Newsletter is for informational purposes only and does not constitute, either explicitly or implicitly, any provision of services or products by 3iQ Corp (“3iQ”). Investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular situation.3iQ Corp. makes no representation or warranty to any investor regarding the legality of any investment, the income or tax consequences, or the suitability of an investment for such investor. All content is original and has been researched and produced by 3iQ unless otherwise stated therein. No part of the content may be reproduced in any form, or referred to in any other publication, without the express written permission of 3iQ. All statements made regarding companies, securities or other financial information contained in the content or articles relating to 3iQ are strictly beliefs and points of view held by 3iQ and are not endorsements of any company or security or recommendations to buy or sell any security. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. By visiting and/or otherwise using the 3iQ website in any way, you indicate that you understand and accept the terms of use as set forth on the website and agree to be bound by them. If you do not agree to the terms of use of the website, please do no access the website or any pages thereof. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with 3iQ with respect to any linked site or its sponsor, unless expressly stated by 3iQ. Any such information, products or sites have not necessarily been reviewed by 3iQ and are provided or maintained by third parties over whom 3iQ exercises no control. 3iQ expressly disclaims any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites. The information contained herein, while obtained from sources believed to be reliable, is not guaranteed as to its accuracy or completeness and confers no right on purchasers. Past performance of cryptoassets is not indicative of future performance and should not be used to forecast any return that an investor may realize.

Fred Pye

Frederick T. Pye


Frederick T. Pye is the Chairman, Chief Executive Officer and Director of 3iQ Corp. He is also the Chairman and Director of 3iQ Digital Holdings Inc. Mr. Pye is recognized for creating and promoting creative and unique investment products for the investment industry.

Mr. Pye has managed private client portfolios with Landry Investment Management and various other investment dealers. Prior to this Mr. Pye was Founder, President & Chief Executive Officer of Argentum Management and Research Corporation, a company dedicated to managing and distributing quantitative investment portfolios including the first long-short mutual fund in Canada.

He was also Senior Vice-President and National Sales Manager of Fidelity Investments Canada and an integral part of the team that saw assets rise from $80 million to over $7.5 billion in assets under management during his tenure. He also held various positions with Guardian Trust Company, which listed the first Gold, Silver and Platinum Certificates on the Montreal Exchange.

Mr. Pye obtained a Masters in Business Administration from Concordia University.